Review: 'Revising Capital': B Fine and L Harris, Rereading Capital

REVISING CAPITAL

B Fine & L Harris, Rereading Capital, Macmillan, London, 1979, pp 184, £3.50.

The early 'seventies witnessed a revival of interest in Marxism among academic economists. Exasperated by the failure of bourgeois economic theory to explain the ever-worsening capitalist crisis, lecturers discarded their copies of Lipsey and turned their attentions to Capital and and Samuelson the Grundrisse instead. But most members of the new generation of 'Marxist economists' made no break with the bourgeois world view. They merely gave it a radical slant.

Phrases such as 'dialectical' and 'contradiction' began to pepper the pages of books which saw the cause of inflation and falling profitability in trade union militancy.? Many of Marx' fundamental categories, such as value, productive labour, accumulation and competition, were either discreetly redefined or rejected out of hand Rereading Capital proclaims itself a commentary on the debates that sprung up around these topics. Written by two leading Communist Party economists, it is a theoretical apology for the politics of contemporary British Stalinism. This is why it deserves a critique. Lenin pointed out that without revolutionary there could be no revolutionary movement. The converse is true: opportunist politics always a justification in revisionist theory ... theory which revises' Marx to make him more suited to modern times.

Although it is openly critical of many of Marx' conclusions Fine and Harris obviously want Rereading Capital to be seen as a serious analysis, one faithful to the spirit - if not exactly the letter - of Marx. Again and again we are told that 'production is determinate', as against bourgeois economists who focus on the sphere of circulation, and that there is a 'fundamental antagonism of the bourgeoisie and proletariat'. This all seems rather removed from the CP we know so well, the CP of vulgar underconsumptionism? and class collaboration. Yet it isn't.

Rereading Capital is presented as an attack dominant trends in the debates: "Neo-Ricardianism' and 'Fundamentalism'. The neo-Ricardians go too far. They reject outright Marx' theory of value and his analysis of capitalism. "Fundamentalists', on the other hand, have the audacity to defend Marx' critique of political economy on key issues. Fine and Harris try to use Marx to expose the errors of both 'one-sided" schools and advance their own views. In fact they manage only to take revisionism to a new level of sophistication. Their success in this is particularly interesting on two issues.

First, the formation of an average rate of profit across different branches of industry • the transformation 'prob- • Marx explained the formation of an average rate of profit and prices of production through the flow of capital from less profitable to more profitable branches of industry (Capital, Vol 3. Lawrence & Wishart, London, 1974, p195).

Fine and Harris repeat the familiar allegation that this is "inadequate': Marx 'failed' to transform the capital advanced into prices of production (p24). Despite protestations to the contrary, this position puts them firmly in the camp of the neo-Ricardians, distinguishing between a so-called value rate of profit' and a 'price rate of profit'.

They come to this conclusion because they make the 29 mistake other revisionists. The transformation as 'problem' is presented in the manner of bourgeois economics, as a mathematical system of simultaneous equations based on the reproduction schemes in the second volume of Capital. This is not only methodologically incorrect (see R Rosdolsky, The making of Marx' Capital, Pluto, London, 1977, chapter 30, for a discussion on this). It also leads to such absurdities as the total value of commodities being different from their sum of prices, or total profit representing something other than total surplus-value.

Fine and Harris try to live with the consequences of their analysis by ignoring them; and second, as Marx commented on an earlier bourgeois economist, by rendering them 'sublime through a mystifying mode of expression (Capital, Vol 3, p397). They are, they claim, studying the 'articulation between production, exchange and distribution and their displacements' (p37). So anything goes.

It is when Fine and Harris deal with the theory of crisis that the consequences of their articulate brand of revisionism become clear. On the question of the tendency of the rate of profit to fall we are offered an outright distortion of Marx. This is not surprising. Marx held his explanation of the cause of capitalist crisis to be absolutely central to his theory; when revisionists come to prove him wrong they tend to show their true colours very distinctly.

Fine and Harris kick off with idiotic definitions of Marx' categories. Marx defined the technical composition of capital as 'the relation between the mass of the means of production employed, on the one hand, and the mass of labour necessary for their employment on the other' (Capital, Voll, Lawrence & Wishart, London, 1974, p574). Fine and Harris redefine it as 'the ratio of the mass of means of production consumed per production period (ie abstracting from fixed capital) to the mass of wage goods' (p59). In fact Marx did not 'abstract' from fixed capital. Nor did his definition have anything to do with 'the mass of wage goods' - presumably a of the number of workers' lunch capitalists cast into the machinery to keep it going.

Having consigned the technical composition of capital to oblivion, Fine and Harris proceed to give the value and organic compositions of capital the Black Hole treatment.

The aim is to deny that the value composition of capital tends to increase with accumulation (p63). Having removed this essential prop to Marx' theory, the authors go on to reformulate what Marx termed 'the most important law of modern political economy' - the tendency of the rate of profit to fall - as the law of the tendency of the rate of profit to fall and its counteracting tendencies' (p64). According to them the rate of profit need not actually fall. It only has an 'abstract tendency' to do so because of the American Nobel Prizewinner P A Samuelson's Economics, and his British counterpart, R G Lipsey's Positive Economics, have long been standard texts for the student of bourgeois economic theory. The most famous is Glyn and Sutcliffe's British capitalism, workers and the profit squeeze, Penguin, 1972. Glyn is a member of the Militant tendency and Sutcliffe a member of the Workers Socialist League. The CP journal Marxism Today has been full of articles along the same lines. A clear example is 'Inflation and crisis' by Bob Rowthorn in the November 1977 issue. Underconsumptionism is the theoretical basis for CP industrial organiser Mick Costello's pamphlet Cut the dole queues.

CPGB, 1979. Costello calls for an 'increase in purchasing power' to stimulate demand and revive the economy. Of course he supplements his utopianism with the reactionary call for import controls to protect British industry.

counteracting influences; the 'contradictory relationship' between the two 'gives rise to crises, booms, and the associated cycles of production and exchange' (p71).

Fine and Harris do not realise that it is precisely because there are counteracting influences that the law of the falling rate of profit acts only as a tendency (Capital, Vol 3, p234).

Marx showed that the counteracting tendencies were unable to overcome the long-term decline in profitability. Fine and Harris are back in the realm of bourgeois economy.

They portray an unregulated economy which suffers cyclical fluctuations but no immanent tendency towards collapse.

Along the way they destroy the scientific basis for the struggle for socialism, denying that the crisis can only be resolved in the interests of capital through a relentless attack on the Obscuring capitalism's crisis of profitability serves Fine and Harris well in their later arguments. It opens up room for reformist politics. The fight to defend jobs from the bourgeoisie's redundancy plans can be channelled into calls for nationalisation and the 'planned production of use-values' And whether nationalised industries 'operate as capital' is, we are told, determined by 'class struggle over the control of. production' (p130). So nationalisation plus class struggle can end unemployment. Again, far from being vital to the bourgeoisie's struggle to raise the rate of exploitation and restructure industry, wage policies 'are not always in the interests of capital as a whole and may contribute toward inflation by weakening the tendency toward restructuring of capital' (p144). True to the Communist Party's left alternative strategy, Fine and Harris provide a theoretical underpinning for the demand to raise wages - as a means of reflating the economy and so regenerating British industry.

Fine and Harris' national-reformist politics do not end with Marx. Lenin's Imperialism, the highest stage of capitalism was, it appears, 'specific' to the early twentieth century (p150); the relationship between unity and rivalry in the imperialist camp must now be 're examined' (p161).

Fine and Harris begin their re-examination from an unobjectionable starting point - the increased internationalisation of capitalist production in the post-war period. But from this they conclude that an 'international capital' exists over and above every capitalist nation state (p153). Once more, Fine and Harris enable the CP to present chauvinist demands - in particular, those for import controls - as radical anti-imperialist ones (for examples of this line of argument, see 'Crisis, the labour movement and the alternative economic strategy', in Capital and Class, No 8, summer 1979, p76 and 'Balance of payments and international policy' in Economic Bulletin, Economic Committee CPGB, autumn 1977, Pp 20-22).

Rereading Capital is a by-product of the degeneration of Marxist ideas and of their virtual disappearance as a force in the labour movement. Things were not always so. In 1872 Marx wrote to a French correspondent: 'I applaud your idea of publishing the translation of Das Kapital as a serial.

In this form the book will be more accessible to the working class, a consideration which to me outweighs everything else' (Capital, Vol 1, p30). Fine and Harris may be surprised when Capital becomes a best-seller. But the time will come.

Meanwhile, the sooner academic bookshops start to remainder Rereading Capital the better.